Skeletogenesis in the craniofacial region, trunk and limbs is regulated by members of the bone morphogenetic protein (BMP), hedgehog and Wnt families of signaling factors. Interestingly, these factors are all heparan sulfate (HS)-binding proteins, and studies have shown that the HS chains influence their distribution and bioavailability and function on target cells. A number of congenital conditions are caused by mutations in HS- related mechanisms, and a case in point is Hereditary Multiple Exostoses (HME) that I am studying as part of my ongoing Ph.D. thesis work. HME is a pediatric autosomal dominant disorder during which cartilage-capped outgrowths called exostoses form within perichondrium next to the growth plate and cause growth retardation, skeletal deformities, chronic pain and early onset osteoarthritis. HME is caused by heterozygous loss-of- function mutations in EXT1 and EXT2 that encode glycosyltransferases responsible for HS synthesis. Thus, patients display varying degrees of HS deficiency, but it is unclear how HS deficiency leads to exostosis formation and other HME-associated skeletal pathologies. To clarify these mechanisms, I created conditional mouse embryo mutants in which the Ext1 gene was ablated in perichondrial cells. Strikingly, this caused formation of exostosis-like cartilaginous masses within perichondrium with 100% penetrance. In good correlation, I found in mesenchymal cell micromass cultures that HS deficiency markedly increased chondrogenic differentiation and responsiveness to pro-chondrogenic factors such as BMP2. Additionally, studies by others showed that expression of HS-degrading enzyme heparanase (HPSE) is high in exostosis tissue. Thus, the central hypothesis of my NRSA proposal is that HS is a major regulator of anti- chondrogenic mechanisms during skeletogenesis. HS would do so by promoting the function of anti- chondrogenic HS-binding factors including transforming growth factor 2 (TGF2) that are normally needed to regulate the perichondrial phenotype and chondro-perichondrial interactions. Congenital alterations in such mechanisms due to HS deficiency would cause ectopic chondrogenesis such as that seen in HME. My Aims are: (i) To analyze HS regulation of TGF2 and BMP action in ectopic cartilage formation in vivo and use in vitro cell systems to test underlying mechanisms; and (ii) To determine the roles of heparanases in modifying HS function, using gain- and loss-of-function approaches and cell-protein interaction assays. The proposed studies will provide novel insights and a wider breadth of knowledge into HS roles in the developing skeleton and their deranged action and function in HME. Chondrogenesis is reactivated during fracture repair and even in fractured craniofacial bones that often heal by endochondral ossification; it is also being experimentally tested in bioengineering approaches to repair and regenerate craniofacial and limb skeletal structures. Thus, my proposed studies on HS roles in chondrogenesis and skeletogenesis have broad biological significance and translational medicine implications that I could pursue in future projects.